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Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

How does UltraTax CS/1120 calculate the built-in gain tax?

Answer

The built-in gain tax is calculated on the Built-In Gains Tax Worksheet. UltraTax CS prints this worksheet when there is data entered in any of the following places.

• The FMV at S Election Date and Adj Basis at S Election Date columns in the Detail schedule statement dialog in Screen D
• The Ordinary income: Recognized Built-In Gain (Loss) statement dialog in Screen D
• The Recognized Built-In Gain Carryover column fields in Screen D
• The Fair market value at S Corporation election date (S Corp) and Adjusted basis at S Corporation election date (S Corp) fields in Screen Sale

  Note: These fields are also available in the Disposal tab in the asset module.

• The Net unrealized built-in gain (S Corp) field in Screen InstPY

The built-in gain tax is allocated to the category of income in which the tax was generated. For example, if the S Corporation disposed of both a long-term capital asset and an ordinary income asset that was subject to the built-in gain tax, a portion of the tax would be allocated to the long-term capital gain, and a portion of the tax would be allocated to the ordinary income.

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